When Does Money Matter?

By Adam Zagorin and John F. Dickerson

John McCain is to campaign-finance reform what John Brown was to the abolition of slavery: the guy with the ax. So what happens if you have to swing it at yourself? McCain's services on behalf of a major contributor gave an opening last week to George W. Bush, the man who has benefited most, dollarwise, from things as they are. McCain is being asked to explain why he wrote letters to various federal agencies in support of 15 of his top campaign donors. "Somebody who makes campaign finance an issue has got to be consistent," Bush declared, "and walk the walk." At the first of the Republican debates last week, McCain walked it this way: "These uncontrolled contributions taint all of us."

The storm began over letters McCain wrote on behalf of Paxson Communications, one of the nation's largest broadcast groups, which wanted to buy a license to a Pittsburgh TV station. Paxson has a stake in 72 stations and 51 affiliates that carry its family-oriented programming. Pittsburgh is the one major metropolitan area where it had no broadcast presence. The license it sought was owned by a public-television station, WQED. Approval of the transfer was under consideration at the FCC for four years. Late last year Paxson executives gave and helped raise $20,000 for the McCain campaign. Soon after, McCain asked the FCC to vote quickly on whether to allow the company to acquire the license. FCC chairman William Kennard, a Democrat, wrote back a sharply worded rebuke to the Senator complaining that he was interfering in agency deliberations.

To control the damage, McCain's campaign team canceled a Florida fund raiser given by Paxson's chairman and released more than 1,500 pages of letters McCain wrote as chairman of the Senate Commerce Committee to agencies under the committee's jurisdiction. That was intended to prove that even if McCain had assisted Paxson and a wide variety of others, such as BellSouth, Ameritech and US West, he had also helped nondonors, including a Texas radio station. In one case he asked for an investigation of the use of cartoon characters on gambling machines, against the wishes of major gambling-industry contributors.

Did McCain cross an ethical line? McCain insists that with Paxson he merely sought some kind of timely action on the license, not approval. In a handful of cases, he did ask regulators to satisfy a company's request for specific action, though defenders say the Senator was acting in accordance with his long-standing belief that federal agencies should not interfere in the free market. "What's wrong is when someone does something he doesn't believe in because of a donation," says Reed Hundt, former FCC chairman. "That is not John McCain."

But McCain's letters are not the only work he's done on behalf of Paxson and other broadcasters. In a little-noticed move last June, McCain tried to attach to a telecommunications bill a provision that would have made it easier for broadcast groups to own more than one TV station in a market. McCain's measure was dropped when Democrats objected. In August the FCC moved to allow many of the changes McCain wanted. One result: Paxson's stock price jumped more than 30% as it became more attractive to other large broadcasters. McCain said last week that his job as Commerce Committee chairman "is to make the bureaucrats work for the people." But when it helps contributors too, McCain the reformer--fairly or not--has a problem.

--By Adam Zagorin and John F. Dickerson